2024-22-004 PBMS SSJF 071525 v.7.01.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 9

Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Division of Medical Programs/Bureau of Professional & Ancillary Services/Pharmacy

Need Identified Date: Aug 1, 2025 Supply/Service Need By Date: Mar 31, 2027

Project Title: Pharmacy Benefit Management System (PBMS) Sole Source

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Provide a description of the supplies or services required:

Healthcare and Family Services (HFS) requires a Pharmacy Benefit Management System (PBMS) to support its Pharmacy Service Programs. HFS administers the Medical Assistance Program for the State of Illinois, a $37.65 billion per year program that serves approximately 3.9 million customers through over 133 ,000 providers. HFS processes over 1 million Fee-for-Service (FFS) claims per year and 2.6 million Managed Care Organization(MCO) encounter claims and oversees the administration of federally mandated Title XIX (Medicaid) and Title XXI (CHIP) programs. HFS is requesting a Sole Source contract in order to secure continued operations under our current PBMS to ensure continuity of medical and pharmaceutical care for the State's Medicaid population, to meet our statutory billing requirements and to continue collection of $2.4 Billion in rebates to provide funding for the State’s Medicaid program(s).

Value: Estimated Value of Initial Term, this Change Order or Amendment: 14,536,291.65

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Source

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Aug 1, 2025

Estimated Contract End Date: Mar 31, 2027

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

The proposed multi-year Sole Source contract is a strategically and economically sound approach that ensures continuity of essential pharmacy services, mitigates implementation risks, and positions HFS for a successful competitive procurement and transition. It offers clear economic and operational advantages over piecemeal, short-term alternatives, and aligns with the scheduled sunset of the current PBMS platform.This Sole Source contract is a temporary, non-renewable bridge designed to support the agency during an unprecedented cybersecurity recovery while ensuring compliance with both state and federal program requirements.

Economic Benefits include, but are not limited to the following: A single, well-negotiated multi-year agreement is more cost-effective than multiple short-term contracts, which would require repeated procurement, onboarding, and transition efforts; avoids duplicative administrative, legal, and operational costs; a multi-year commitment provides the vendor with assurance and incentive to invest in system stabilization, staffing, and enhanced service quality over the term; ensures adequate support and maintenance of the current platform until its sunset without incremental cost escalations.; by aligning the Sole Source term with the final end-of-life date of the existing PBMS, the Agency avoids the risk of rushing a transition, which could result in system failures, non-compliance penalties, or costly remediations; allows for thorough planning and testing with the new vendor, avoiding costly errors and ensuring federal certification readiness; fixed pricing over the multi-year term allows for budget predictability, smoothing expenditure over time rather than dealing with unpredictable short-term contract negotiations and possible emergency extensions; the existing vendor’s deep familiarity with the Agency’s pharmacy program, federal compliance requirements, and system architecture reduces operational risk and supports continued performance until transition.

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Critical Changes to the Existing Contract are Necessary and Best Accomplished by the Contract Holder

Are there secondary justification(s) for this sole source? Yes No

Another justification that this purchase is only available from a sole source is because it is:

Potential loss of federal funding.

Another justification that this purchase is only available from a sole source is because it is:

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 Mar 17, 2014 Mar 16, 2019 28,571,859.46 Good Systems Contract 2012-62-006 RFP

2 Aug 22, 2014 Mar 16, 2019 0 Name/Location Change 2012-62-006KA1 Amendment

3 Feb 25, 2015 Mar 16, 2019 0 Numerous Section Clarifications 2012-62-006KA2 Amendment

4 Sep 18, 2018 Mar 16, 2019 0 Corporate Name Change/Numerous Section Clarifications 2012-62-006KA3 Amendment

5 Mar 17, 2019 Mar 16, 2024 34,444,132.57 Contract Renewal 2012-62-006KR1 Renewal

6 Mar 17, 2024 Jun 14, 2024 1,512,162.2 Emergency Declaration 2024-22-005 Emergency

7 Jun 15, 2024 Dec 14, 2024 2,778,078.32 Emergency Extension 2024-22-005-02 Emergency Extension

8 Dec 15, 2024 Dec 14, 2025 5,886,113 Emergency Extension 2024-22-005-03 Emergency Extension

If more than 10, or if other comments, explain:

Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

HFS relies on the annual revenue of $2.4 billion (approximately $200 million per month) generated by the Drug Rebate program through collected rebates, which is crucial to funding many of the State's Medicaid programs. The Agency requires a vendor to provide claims reimbursement to receive payment for the appropriate state and federal rebate amounts. This process ensures that customers can access all necessary life-saving medications, maintenance medications, over-the-counter drugs, and vaccines. To meet these requirements, HFS requires Pharmacy Benefit Management Services (PBMS) to process and adjudicate pharmacy claims, complying with Federal Regulations, Illinois Statutes, associated Illinois Administrative Rules, and policies set by State and Federal Governments.

Pharmacies also rely on HFS' PBMS to submit pharmacy claims for payment. The PBMS facilitates prior authorizations, which are essential for the health and safety of approximately 3.9 million Illinois Medicaid customers. The PBMS enables the management of a Preferred Drug List (PDL), which would not be enforceable without a functional PBMS to monitor and edit claims. The current system interfaces with the provider enrollment system, eligibility systems, and the legacy MMIS system. Additionally, technical services are necessary during the contract to allow for programmatic changes/additions which may arise during the contract period and to ensure a smooth transition of data to a newly awarded Vendor.

2. Provide a list and describe in detail the specifications required to satisfy the need:

See attached document labeled "PBMS Q2 Response" for response to question 2.

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

The current Pharmacy Benefit Management System (PBMS) has undergone extensive programming, incorporating unique edits and overrides to meet the specific business rules and policies of the State of Illinois. For example:

4-Script Rejection Edit: Enables clinical pharmacists to review claims for medical necessity.

340B Drug Edits: Uniquely identify 340B-discounted drugs at the claims level, rather than at the provider level—an approach specific to Illinois.

State-Specific Pricing Logic: Custom pricing algorithms have been integrated into the system to comply with Illinois Medicaid requirements.

The PBMS contains more than 100 meticulously programmed features. Each one ensures alignment with federal regulations, Illinois state laws, applicable administrative rules, and policies unique to the Illinois Medicaid program, all while prioritizing appropriate customer care.

Change Healthcare Pharmacy Solutions, the provider of this PBMS, is currently the only vendor and system capable of meeting both the statutory and federal regulatory requirements of the Pharmacy Program. Until a new competitive solicitation can be completed and awarded, no other pharmacy benefit vendor or system can deliver the required services without causing an extended disruption. Given the essential nature of pharmacy benefit services, such a break in service is not feasible.

Additionally, HFS will suffer a loss of 50% match in federal funding if the Agency is unable to execute a new agreement.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

Over the past decade, the current Vendor, Change Healthcare Pharmacy Solutions, Inc., has dedicated programming and adapted their system to meet the needs of the Illinois Medicaid Program, including the eligibility hierarchy, different formularies for eligibility groups, and all edits and available overrides necessary for the system to function properly for the State of Illinois. Change Healthcare has demonstrated the ability to successfully facilitate the provision of services for Illinois Medicaid customers. Change Healthcare has effectively worked on adapting to the unique and numerous specific needs of HFS to ensure accurate payment of pharmacy claims while also ensuring that the customer's health needs are at the forefront. Investments in the current PBMS include 10+ years and $3.1 million in DDI costs which have allowed for the successful programming which is streamlined and able to successfully adjudicate claims according to federal regulations, state statutes, and associated administrative rules and policies unique to the Illinois Medicaid Assistance Program.

Change Healthcare Pharmacy Solutions, the provider of this PBMS, is currently the only vendor and system capable of meeting both the statutory and federal regulatory requirements of the Pharmacy Program. Until a new competitive solicitation can be completed and awarded, no other pharmacy benefit vendor or system can deliver the required services without causing an extended disruption. Given the essential nature of pharmacy benefit services, such a break in service is not feasible. A new competitive solicitation, RFP, is in the final drafting stages and is expected to be published in the 4th quarter of 2025.

The Sole Source contract is not intended to replace a competitive procurement but rather to act as a temporary bridge ensuring uninterrupted service until a competitively awarded PBMS contract can be fully executed and operational.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

5a. If no, why weren't alternatives evaluated?

HFS is currently operating under an Emergency contract for Pharmacy Benefit Management Services, initiated in response to a major cybersecurity incident that occurred in February 2025. This emergency contract has been extended twice and is now set to expire on December 14, 2025. The resulting contract from this Sole Source, will replace the current emergency contract. HFS is in the final stages of drafting a Request for Proposals (RFP) for a competitively procured long-term PBMS contract. However, the RFP is not expected to be released until the 4th Quarter of 2025, and due to the scope and complexity of the services required, a new vendor cannot be expected to fully implement and operationalize a compliant PBMS solution within the remaining time-frame. Additionally, the current PBMS system is scheduled to sunset on March 31, 2027, establishing a firm end-date for the existing platform's support. This deadline further underscores the need for a stable and uninterrupted transition period to avoid disruption to critical pharmacy services for Medicaid customers. Given the unique operational requirements of the pharmacy program, the technical and regulatory complexity involved, and the compressed timeline, HFS has determined that a Sole-Source contract is necessary. This Sole Source contract will ensure continuity of services while providing adequate time for: completion of a competitive procurement, evaluation/selection of a Vendor, comprehensive and compliant transition plan, system design, development, testing and implementation. The Sole Source contract is not intended to replace a competitive procurement but rather to act as a temporary bridge ensuring uninterrupted service until a competitively awarded PBMS contract can be executed and operational.

6. Are there resellers or distributors?

Yes No N/A

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

Current services were competitively procured through the Request for Proposal (RFP) Process in 2012. The contract was awarded to the most responsive and responsible offerer at a fair and reasonable price. This is a transactional based contract, meaning, many of the costs are subscription, annual and per transaction rate (fluctuates based upon number of transactions). There are multiple approaches to Pharmacy Benefit Programs, therefore, it is difficult to compare pricing amongst the States. Some States offer Pharmacy Benefit Managers/Administrators which run the entire program, including drug rebate, some States offer Pharmacy Benefit Services which are not inclusive of drug rebate, and other States have Pharmacy Benefit Systems with/without drug rebate. The State of Illinois provides a Pharmacy Benefit System w/a partial drug rebate solution, which is unique from other States. The Operational costs and Hosting services have increased mainly due to the age of the system and the hosting requirements which need to be maintained until a new solution can be procured. HFS compared the Hosting and Software costs and Operations and Maintenance costs between a similar sized contract within the Agency and the PBMS, for a twelve month period, the results are as follows:

Hosting/Software IMPACT Project: $5,910,650.95 PBMS: $2,071,328.52

Operations and Maintenance IMPACT Project: $13,099,766.76 PBMS: $4,902,584.04.

Additionally, technical services hourly rates have been brought up to current market prices from 2012 as shown on the following web pages: https://consultingmavericks.com/start/other/average-consulting-rates-by-industry/ and https://www.cleveroad.com/blog/it-consulting-rates/

The contract costs includes 10,000 application support hours to be used by the Agency for for system modifications requested and approved by HFS that may be required and are not possible by modification of the workflow or business rules engine. The Vendor will be tasked to provide technical support for any elements of the PBMS that are the result of customizing software or Vendor-developed interfaces specific to HFS. The block of hours will be used by the Vendor and will be managed by task order by HFS.

Cost Breakdown is as follows:

Operations and Maintenance $408,548.67 20 month $8,170,973.40 National Drug File $271,000.00 2 annual $542,000.00 State MAC Services $8,519.09 20 month $170,381.80 Pharmacy Claims switch $0.01 20,072,225 each $200,722.25 PBMS Hosting Svc $172,610.71 20 month $3,452,214.20 PBMS Application Support $200.00 10,000 hours $2,000,000.00

Total $14,536,291.65

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

The absence of the current PBMS vendor to bridge this gap would result in a catastrophic failure of HFS' ability to process and adjudicate pharmacy claims. This would have dire consequences for over 3.9 million Illinois Medicaid customers, as they would be unable to access essential medications, maintenance drugs, over-the-counter medicines, or vaccines, putting their health, life and safety at significant risk. Furthermore, pharmacies would be unable to submit pharmacy claims for payment. The impact on life and health, combined with the long-term ramifications of a failed PBMS, cannot be understated. The State of Illinois Medicaid program primarily serves the most vulnerable citizens of the state, and depriving them of access to healthcare could lead to severe illnesses, injuries, and even fatalities. The absence of a functional PBMS not only endangers the Pharmacy program and its beneficiaries but also directly impacts the funding of various other programs within HFS. The Drug Rebate program alone generates over $2.4 billion ($200 million monthly) in revenue, which plays a crucial role in funding the state's Medicaid programs. Additionally, there is a need for transition services to migrate historical data from the current system to the new one and to facilitate the closure of the existing contract. Support services with the current file formats will be essential to bridge the gap between the current contract and the contract with the newly procured vendor.

10. Is there any additional information you would like to add to justify this sole source?

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date Jul 16, 2025

Printed Name Jose Jimenez E-mail Address jose.jimenez@illinois.gov

Phone Number 2175247112

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address monique.n.wantland@illinois.gov

Phone Number 217-557-5777 Date Jul 16, 2025

Printed Name Monique N Wantland@illinois.gov

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217-299-5883 Date 07/16/2025

Printed Name Rebecca Gossett E-mail Address rebecca.gossett@illinois.gov

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Bulletin Reference Number 26-478HFS-MEDPR-B-48652

Requesting Agency/University Healthcare and Family Services

Sole Source Justification Form - Part II Section I - General Information

Project Title Pharmacy Benefit Management System (PBMS) Sole Source

Vendor Change Healthcare Pharmacy Solutions, Inc.

Initial Date of Procurement Bulletin Posting

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone 217-622-1857

Printed Name Ellen H. Daley Date

CPO E-mail ellen.h.daley@illinois.gov

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229 ellen.h.daley@illinois.gov

Economic Benefits include, but are not limited to the following: A single, well-negotiated multi-year agreement is more cost-effective than multiple short-term contracts, which would require repeated procurement, onboarding, and transition efforts; avoids duplicative administrative, legal, and operational costs; a multi-year commitment provides the vendor with assurance and incentive to invest in system stabilization, staffing, and enhanced service quality over the term; ensures adequate support and maintenance of the current platform until its sunset without incremental cost escalations.; by aligning the Sole Source term with the final end-of-life date of the existing PBMS, the Agency avoids the risk of rushing a transition, which could result in system failures, non-compliance penalties, or costly remediations; allows for thorough planning and testing with the new vendor, avoiding costly errors and ensuring federal certification readiness; fixed pricing over the multi-year term allows for budget predictability, smoothing expenditure over time rather than dealing with unpredictable short-term contract negotiations and possible emergency extensions; the existing vendor’s deep familiarity with the Agency’s pharmacy program, federal compliance requirements, and system architecture reduces operational risk and supports continued performance until transition.

4-Script Rejection Edit: Enables clinical pharmacists to review claims for medical necessity.

340B Drug Edits: Uniquely identify 340B-discounted drugs at the claims level, rather than at the provider level—an approach specific to Illinois.

State-Specific Pricing Logic: Custom pricing algorithms have been integrated into the system to comply with Illinois Medicaid requirements.

The PBMS contains more than 100 meticulously programmed features. Each one ensures alignment with federal regulations, Illinois state laws, applicable administrative rules, and policies unique to the Illinois Medicaid program, all while prioritizing appropriate customer care.

Change Healthcare Pharmacy Solutions, the provider of this PBMS, is currently the only vendor and system capable of meeting both the statutory and federal regulatory requirements of the Pharmacy Program. Until a new competitive solicitation can be completed and awarded, no other pharmacy benefit vendor or system can deliver the required services without causing an extended disruption. Given the essential nature of pharmacy benefit services, such a break in service is not feasible.

Additionally, HFS will suffer a loss of 50% match in federal funding if the Agency is unable to execute a new agreement.

Q4Answer: Over the past decade, the current Vendor, Change Healthcare Pharmacy Solutions, Inc., has dedicated programming and adapted their system to meet the needs of the Illinois Medicaid Program, including the eligibility hierarchy, different formularies for eligibility groups, and all edits and available overrides necessary for the system to function properly for the State of Illinois. Change Healthcare has demonstrated the ability to successfully facilitate the provision of services for Illinois Medicaid customers. Change Healthcare has effectively worked on adapting to the unique and numerous specific needs of HFS to ensure accurate payment of pharmacy claims while also ensuring that the customer's health needs are at the forefront. Investments in the current PBMS include 10+ years and $3.1 million in DDI costs which have allowed for the successful programming which is streamlined and able to successfully adjudicate claims according to federal regulations, state statutes, and associated administrative rules and policies unique to the Illinois Medicaid Assistance Program.

Change Healthcare Pharmacy Solutions, the provider of this PBMS, is currently the only vendor and system capable of meeting both the statutory and federal regulatory requirements of the Pharmacy Program. Until a new competitive solicitation can be completed and awarded, no other pharmacy benefit vendor or system can deliver the required services without causing an extended disruption. Given the essential nature of pharmacy benefit services, such a break in service is not feasible. A new competitive solicitation, RFP, is in the final drafting stages and is expected to be published in the 4th quarter of 2025.

The Sole Source contract is not intended to replace a competitive procurement but rather to act as a temporary bridge ensuring uninterrupted service until a competitively awarded PBMS contract can be fully executed and operational.

Hosting/Software IMPACT Project: $5,910,650.95 PBMS: $2,071,328.52

Operations and Maintenance IMPACT Project: $13,099,766.76 PBMS: $4,902,584.04.

Additionally, technical services hourly rates have been brought up to current market prices from 2012 as shown on the following web pages: https://consultingmavericks.com/start/other/average-consulting-rates-by-industry/ and https://www.cleveroad.com/blog/it-consulting-rates/

The contract costs includes 10,000 application support hours to be used by the Agency for for system modifications requested and approved by HFS that may be required and are not possible by modification of the workflow or business rules engine. The Vendor will be tasked to provide technical support for any elements of the PBMS that are the result of customizing software or Vendor-developed interfaces specific to HFS. The block of hours will be used by the Vendor and will be managed by task order by HFS.

Cost Breakdown is as follows:

Operations and Maintenance $408,548.67 20 month $8,170,973.40 National Drug File $271,000.00 2 annual $542,000.00 State MAC Services $8,519.09 20 month $170,381.80 Pharmacy Claims switch $0.01 20,072,225 each $200,722.25 PBMS Hosting Svc $172,610.71 20 month $3,452,214.20 PBMS Application Support $200.00 10,000 hours $2,000,000.00

Total $14,536,291.65